Menu Style Multiple Contracts

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Q. Our menu bid received two responsive bids from different vendors offering the same product. Obviously, one is priced lower than the other. We have included both of these bids in our purchasing schedule as we believe 49 U.S.C. Section 5325(c) authorizes the recipient to award a contract to other than the lowest bidder if the award furthers an objective consistent with the purposes of 49 U.S.C. Chapter 53, including improved long-term operating efficiency and lower long-term costs. Hence, transit agencies may consider superior logistical support (service) as a factor in determining purchases. Is this a correct interpretation of FTA’s regulations?

A. FTA Circular 4220.1F, Chapter IV 2.e.(9) permits grantees to award contracts for rolling stock "based on initial capital cost, or based on performance, standardization, life cycle costs, and other factors, or by selection through a competitive procurement process."  The Circular is available online: http://www.fta.dot.gov/laws/circulars/leg_reg_8641.html  (Posted: May, 2010)



Q. A successful vendor to our procurement for cutaway buses is offering an additional parts credit and first time buyers/loyalty rebates aside from the price they bid.  What is the FTA's stance on the disposition of the parts credit and rebates? Are these allowable?
MBTA took the lead role in the formation of a purchasing cooperative for vehicles in our state (California).  Several dozen agencies will be piggybacking off a multiple award contracts for paratransit buse-menu style bid.

A. Concerning the discounts that a vendor is offering, our concern is that a vendor may now be offering something more favorable than what the vendor initially bid, as an inducement to win an order from a transit agency.  We would recommend that if discounts are now to be considered, that all vendors on the menu bid award be notified that they may now offer discounts that will be published on the menu bid price sheets so agencies can factor in the discounts as they evaluate the best value to their agency.   If you allow a vendor to offer something other than what was bid you will be getting into a process where the initial bids become meaningless and agencies will begin to negotiate the best deal they can get with everyone on the menu, thus negating the validity of the initial bids. (Posted: May, 2010)  

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